Everything We Know About Tesla's Next-Gen Car: The More Affordable Model

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During the Q4 2024 Earnings Call, Elon Musk confirmed that Tesla’s next-generation affordable vehicle is set to launch in the first half of 2025. Now, more than three months into 2025, Tesla may be just a few months away from unveiling their next-gen model.

Surprisingly, details remain scarce—no major leaks, early sightings, or concrete reveals. That hasn’t stopped speculation, though.

Project Redwood

Internally, Tesla refers to the project as Project Redwood, while externally, fans and skeptics alike have dubbed it the Model Q or Model 2. A Chinese tech outlet leaked some details back in December, suggesting a vehicle sized somewhere between a MINI and a Model 3.

That estimate aligns with expectations for Tesla’s compact, mass-market EV, but many questions remain. Where will Tesla build it? Will it share parts with other models? And when will customers finally get their hands on it?

We have some ideas on how to answer these questions—and more. Some of this information comes from past Tesla events, such as the “We, Robot” autonomy event and previous earnings calls.

As always, we’ll cite sources where possible and point out where we’re making informed guesses or speculating.

Based on the Cybercab

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Tesla plans to build the Cybercab and the next-generation vehicle at Giga Texas. Initially, both were slated for production at Giga Mexico, but with increased tariffs under the new administration, those plans fell through. As a result, the two vehicles will likely be built side by side, making it essential for Tesla to share as many components as possible.

Just as the Model 3 and Model Y, as well as the Model S and Model X, share numerous parts, the next-gen vehicle is expected to have a significant overlap with the Cybercab. Both are designed for inner-city travel and built with affordability in mind.

However, this doesn’t necessarily mean the next-gen vehicle will resemble the Cybercab. Instead, it will likely use similar components, such as a single lower-horsepower rear motor, a smaller battery pack, and a more compact frame. By streamlining parts production, Tesla can drive down costs to make both the Cybercab and the next-gen vehicle financially viable.

Premium Feel

Lars Moravy, Tesla’s VP of Engineering, recently appeared on the Ride the Lightning podcast, where he discussed the upcoming next-generation affordable model and Tesla’s broader goals.

One key objective is ensuring that every Tesla product feels like a premium purchase—delivering more value than its price suggests. To achieve this, Tesla has been exploring new materials and innovative combinations to improve durability, design, and overall build quality, with the next-gen affordable vehicle being no exception.

Paint-Impregnated Panels

The Cybercab is using unique paint-impregnated plastic panels for its body shell—designed to be easy to produce, customize, and replace. The best part is that nicks and scratches are far less noticeable since the paint runs through the material. This makes repairs and replacements quick and hassle-free in case of accidental damage.

While the Cybercab will only come in the gold color we’ve seen, Tesla is expected to offer multiple variants and color options for the next-gen model. Given how striking the Cybercab’s base color already looks, there’s a strong potential for new finishes and textures unlike anything seen before.

City-Range

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At the We, Robot event, Tesla shared additional details about the Cybercab, and we used that information to estimate its battery size. Based on our findings, we estimate the battery pack to be between 51.6vkWh and 74.6vkWh, which would give the Cybercab an estimated range of 220 to 270 miles, assuming it achieves the 5.5 miles per kWh Tesla mentioned.

Tesla also confirmed during the Q3 2024 Earnings Call that the Cybercab will feature a more power-efficient powertrain, improving its efficiency over current models. This powertrain is likely to be shared with the next-gen model, meaning it will also see a lower miles per kW metric.

Wireless Charging

We don’t believe that Tesla will produce the next-gen model with wireless charging, like the Cybercab. Implementing wireless charging is expensive, and currently, the Cybercab is the only known vehicle capable of using it. The Cybertruck has the necessary receivers, but the feature hasn’t been implemented yet, but may be available as a retrofit.

Tesla has already said they plan to roll out wireless charging at select V4 Superchargers in the future, but these will likely be aimed at the Cybercab and Tesla’s other flagship models. This means that the upcoming Model S and Model X refresh could include wireless charging, but it may remain exclusive to higher-end models before trickling down to the rest of the lineup, due to cost.

Price

Tesla’s next-gen model has often been referred to as the “$25,000” model, however, we need to understand that was more than four years ago. Tesla has been mum on the price point of the vehicle, except for the $25k price tag that was shared back in 2021.

Tesla’s offers a cheaper RWD Model 3 in Mexico for about $37,500 USD that removes certain features such as heated and cooled seats and leather, and Tesla is expected to manufacture a new Model Y that costs 20% less to produce in the future.

We believe Tesla will launch its next-gen vehicle for about $30k before any incentives. Once you account for gas savings and potential incentives, this car could sway a lot of customers due to price alone.

Release Date

Tesla previously hinted at a special event tied to its latest referral rewards system, which we believe may coincide with the unveiling of the next-gen affordable model.

With just a couple months left until until the midway point of 2025, it may not be long before we find out more details about this lower-cost vehicle.

We’re excited to cover the event in person, so if you’re considering buying a Tesla, don’t forget to check out our referral codes.

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Elon Musk Takes Over Tesla Sales For North America and Europe

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Following the recent departure of longtime deputy Omead Afshar, Elon Musk has stepped up to personally oversee Tesla’s sales operations in North America and Europe, according to a new report from Bloomberg, which cites people familiar with the matter.

This is a big shake-up that places Elon directly in charge of fixing Tesla’s sales slump in two key markets. The move has come as Tesla reported nearly on-the-ball deliveries for Q2 2025, hitting 384k deliveries, against a consensus street estimate of 385k deliveries.

New Leadership Structure

According to the report, Afshar’s former responsibilities are being divided between Elon and Senior VP Tom Zhu. Elon will now directly oversee the sales organizations in the US and Europe. As part of this change, Troy Jones, Tesla’s VP of North America Sales, will now report to Elon.

Tom Zhu, who is based in China, will continue to manage sales in Asia while also taking on the critical new responsibility of overseeing global manufacturing operations. Leadership of Tesla’s factories in Fremont, California, and Texas will now report to Tom. Tesla Energy’s factories will still report to Michael Snyder, VP of Energy and Charging.

For now, we’re unsure whether this is a temporary management structure, if the reporting lines will shift, or if Tesla will either hire or promote a new Senior VP of Sales to cover the duties.

Tackling the Sales Slump

The restructuring is a response to the recent downturn in sales. Analysts estimated that Tesla would deliver approximately 385k vehicles, which they essentially managed to achieve. However, deliveries fell short of production numbers, with Tesla delivering just 373k of the 410k vehicles produced.

This situation is particularly challenging in Central Europe. Europe has been noted as Tesla’s weakest market, according to Elon. Interestingly, Elon previously stated in several interviews over the last few months that there was no demand issue, but it now seems that there have been some issues with growing sales.

With Tesla’s new vehicle registrations across Europe having plunged 37% since the start of this year, and the rollout of the new affordable model, as well as more affordable versions of the Model 3 and Model Y seemingly delayed, there is a lot to do. Some analysts are projecting a second consecutive annual decline in Tesla’s global car sales for 2025.

The Rise of Tom Zhu

A key note in this reshuffle is the return of Tom Zhu to a top global operations role. Tom had previously led the construction and ramp-up of Giga Shanghai and was then promoted to Senior VP of Automotive Operations in 2023. Last year, he was sent back to China to focus on tackling regulatory hurdles with the launch of FSD in China.

His return to overseeing global manufacturing, even while staying in China, is a significant vote of confidence in his abilities. It also comes as Chinese authorities have begun drafting new autonomy guidelines to clear a path for the broader rollout of both Supervised and potentially Unsupervised FSD.

Wrap Up

This major restructuring shows that Elon is once again focused on Tesla and plans to personally tackle the company’s biggest issues. This will require a careful hand, as Elon’s forays into politics have caused self-admitted brand damage. If anyone can turn this around and have the Model Y return as the Best-Selling Vehicle of 2026, having just missed out by a few thousand vehicles to the Toyota RAV4, it is Elon.

Alongside him, Tom Zhu will be responsible for streamlining global manufacturing and ensuring that Tesla is ready to launch their new affordable variants in the near future, which should also make a considerable dent in sales.

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Tesla Shares Q2 2025 Numbers: Production and Deliveries Up Over Last Quarter

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Tesla has released its Q2 2025 production and delivery numbers, revealing an improvement in production and deliveries over Q1, but still down from a year ago.

Tesla produced 410,244 vehicles in Q2, nearly equal to their production a year ago, which was 410,831 vehicles. Production for this quarter was significantly up compared to Q1 2025, which only saw 362,615 vehicles produced. While production numbers matched those of a year ago, actual deliveries were down.

Q2 2025 saw Tesla deliver 384,122 vehicles, which was down approximately 59,000 units compared to the same period last year, but up by approximately 48,000 vehicles, or about 14% compared to Q1.

Breakdown by Model

The Model 3/Y segment continues to dominate Tesla’s production profile, accounting for 396,835 units produced and 373,728 delivered in Q2 2025. Deliveries for the “Other Models” category—which includes the Cybertruck, Model S, and Model X—were down compared to the previous quarter, with just 10,394 vehicles delivered, a 20% decline. Compared to a year ago, the drop for these vehicles is even more drastic, with sales being down 52%. Tesla refreshed its Model S and Model X last month with new features; however, the update was much smaller than expected and likely didn’t help much in increasing sales for these vehicles.

Tesla doesn’t break down Cybertruck sales separately, but those deliveries are expected to be down as well.

Tesla noted that 2% of total deliveries this quarter were accounted for under operating lease agreements, consistent with the same quarter last year.

Context and Market Response

While the numbers exceeded some bearish expectations, the year-over-year delivery drop is Tesla’s second straight quarterly decline. Analysts attribute declining sales to increasing EV competition and reputation issues.

Still, investors found relief in the improved quarter when compared to Q1. The stock rebounded about 4% yesterday on the news.

Looking ahead, all eyes are on Tesla’s Robotaxi network, the Cybercab, and the more affordable model, which is slated to be released later this year.

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